Q1 2025 ADMA Biologics Inc Earnings Call
To follow please be advised that this call is being recorded at the company's request and will be available on the company's web site approximately two hours following the end of the call.
At this time I would like to introduce the company. Please go ahead.
Speaker Change: Welcome everyone and thank you for joining us this afternoon to discuss Adler biologic financial results for the first quarter of 2025 and recent corporate updates I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brad Page, Chief Financial Officer and Treasurer.
Brad Page: During today's call Adam will provide some introductory comments and provide an update on corporate progress and then Brad will provide an overview of the company's first quarter 2025 financial results.
Brad Page: Finally, Adam will then provide some brief summary remarks before opening up the call for questions.
Brad Page: Earlier today, we issued a press release detailing the first quarter 2025 financial results and summarize certain achievements in recent corporate updates. The release is available on our website at www dot asthma biologics dot com.
Before we begin our formal comments I'll remind you that we will be making forward looking assertions during today's call that represent the company's intentions expectations or beliefs concerning future events, which constitute forward looking statements for the purposes of safe Harbor provisions under the private Securities Litigation Reform Act of 1995.
Brad Page:
Brad Page: All forward looking statements are subject to factors risks and uncertainties such as those detailed in today's press release announcing this call.
Brad Page: And in our filings with the SEC, which may cause the actual results to differ materially from the results expressed or implied by such statements.
Brad Page: Excuse me. In addition, any forward looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date.
Brad Page: We specifically disclaim any obligations to update any such statements except as required by the federal Securities laws.
Brad Page: We refer you to the disclosure notice section in our earnings release, we issued today and the risk factors section in our SEC filings and our quarterly report on Form 10-Q for the quarter ended March 31, 2025 for a discussion of important factors that could cause actual results to differ materially from these forward looking.
Brad Page: David.
Brad Page: Please note that the discussion on today's call include certain non-GAAP financial measures, including adjusted total revenue adjusted EBITDA and adjusted net income.
Brad Page: A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings release.
Brad Page: With that I would now like to turn the call over to Adam Grossman Adam go ahead.
Adam Grossman: Thank you Skyler.
Adam Grossman: Good afternoon, everyone Atmos momentum has carried strongly into the first quarter of 2025, demonstrating robust execution across all aspects of our business.
Adam Grossman: The advantages of our vertically integrated U S based supply chain along.
Adam Grossman: Along with our domestic commercial footprint have proven critical in the current geopolitical and trade landscape.
This strategic positioning has enabled uninterrupted operations and consistent fulfillment of demand even in the face of escalating global tariff tensions.
Adam Grossman: With our focused solely on the U S health care ecosystem and completely domestic plasma sourcing production and distribution operations.
Adam Grossman: We believe admin is uniquely insulated from the tariff and trade volatility potentially affecting our multinational competitors.
Adam Grossman: The recent approval of our innovative yield enhancement production process marks a pivotal achievement for asthma and is anticipated to provide 20% more bulk IAG from the same starting plasma volumes.
As the first U S producer of plasma derived products to achieve regulatory approval for our novel yield enhancement process.
Adam Grossman: Admah continues to demonstrate its leadership in modernizing and advancing plasma fractionation through agile forward thinking scientific development and execution.
Adam Grossman: We commend our team for advancing this new production process from concept to approval.
Adam Grossman: With speed and capital efficiency and.
Adam Grossman: And we thank the FDA for its thorough and timely review as well as the agency's commitment to expanding <unk> access for immunocompromised patients throughout the U S.
Adam Grossman: With our innovative capital efficient and robust internal R&D engine, we believe which.
Adam Grossman: Which we believe has been further validated with this FDA approval.
We look forward to confidently advancing our R&D platform.
Adam Grossman: Further optimizing production capabilities and progressing novel pipeline programs, most notably S. G 001, which exemplify our commitment to product and process innovation and meeting the unmet medical needs for immuno compromised patients.
Adam Grossman: Our financial results for the first quarter reflects substantial growth and operational achievements.
Adam Grossman: Total revenues reached $114 $8 million on a reported basis, representing an impressive $32 9 million year over year increase in marketing a growth rate of approximately 40%.
Adam Grossman: Adjusting for the one off voluntary product withdrawals during the quarter.
Adam Grossman: Total first quarter 2025 revenues would have been $118 6 million.
Adam Grossman: Representing approximately 45% year over year growth.
Adam Grossman: Illustrating admin is still nascent operating leverage first quarter 2025, adjusted net income and adjusted EBITDA grew by approximately 87% and 81% year over year, respectively.
Adam Grossman: These results underscore the efficacy of our biologic therapies for immuno compromised patients across the U S as well as the dedication and expertise of our leadership team and exceptional staff.
Adam Grossman: Driven by our commitment to financial and operational excellence, we are yet again raising guidance for both 2025 and 2026 for.
Adam Grossman: For 2025, we are increasing total revenue guidance to $500 million or more.
Adam Grossman: Increasing adjusted EBITDA guidance to at least $235 million and reaffirming adjusted net income guidance of $175 million or more.
Adam Grossman: This upwardly revised 2025 guidance excludes potential accretion from the monetization of products sold using the now approved enhanced yield process, which is a function of conservative really contemplating assumptions around timing of the production ramp up and lot release timing.
Adam Grossman: We are additionally, increasing top and bottom line guidance for 2026.
Adam Grossman: Enabled by recent FDA approval of our enhanced yield production process as well as our ongoing commercial momentum.
Adam Grossman: This increased 2026 guidance consistent with historically provided financial targets reflects assumptions of continued margin expansion as our revenue mix shifts towards <unk>.
Adam Grossman: Accordingly for 2026, we are increasing total revenue guidance to $625 million or more.
Adam Grossman: Adjusted EBITDA to $340 million or more in adjusted net income guidance to at least $245 million.
Adam Grossman: Further yet we are increasing our total annual revenue expected to be realized prior to 2030 to $1 $1 billion or more.
Up from the prior guidance of $1 billion.
Adam Grossman: On Atmos pathway to reach this rapid revenue growth the company expects meaningfully outsize margin expansion during the same periods prior to 2030.
Adam Grossman: Through the first quarter of 2025 and subsequent periods.
Adam Grossman: We have driven outsized demand for our commercial products, including both <unk> and incentives with demand consistently exceeding our prior supply capabilities.
Adam Grossman: New patient starts continue to grow and forward looking demand indicators remain robust.
Adam Grossman: Furthermore, we believe recent expansions in both third party and internal high titer plasma supply have markedly derisked, our growth trajectories and enhanced our visibility for continued revenue growth and margin expansion.
Adam Grossman: All told we are increasingly confident in our ultimate ability to drive total incentive annual revenues alone to potentially $1 billion or more with lasting growth in branded durability at least through 2035.
Adam Grossman: We believe our strong balance sheet capital flexibility and growing cash and receivables provide a robust buffer against volatility in the current credit and equity market backdrops.
Adam Grossman: Cash on hand, and accounts receivable grew to a combined $171 million at the end of the first quarter.
Adam Grossman: And we anticipate significant sequential operating cash flow growth throughout 2025.
Adam Grossman: As detailed in our recently announced that reorganization with Ares capital management.
Adam Grossman: <unk> paid down all but $2 $5 million of the term loan using available proceeds from the revolving credit facility.
Adam Grossman: Due to the lower interest rate spread for the revolving credit facility compared to the term loan. This reorganization provides for a one 1% nominal reduction in admin total cost of debt.
Adam Grossman: <unk> remains committed to optimizing its capital structure and continuing to organically pay down its total debt over the near term.
Adam Grossman: Additionally, we are pleased to announce that our board of directors has recently authorized a stock repurchase program that will allow us to purchase up to $500 million of its common stock or approximately 8% of the company's total current market cap.
Adam Grossman: We will be opportunistic in deploying these repurchases, which will be enabled by the anticipated strong balance sheet and forecasted earnings and cash generation moving forward.
Adam Grossman: The collective impact of these sort of initiatives are intended to instill confidence in our stockholder base that address management team and board of directors are aligned with you our stockholders and we are committed to generating durable stockholder value.
Adam Grossman: We believe admins executing from a position of strength.
Adam Grossman: Delivering durable branded growth in underserved markets and building, what we expect will be one of the most resilient and scalable earnings streams in the Biopharma complex.
Adam Grossman: In addition, admin is pursuing capital efficient initiatives to further diversify its uniquely leverages our business model, particularly through the advancement of its lead pipeline program SG Zero-zero one.
Adam Grossman: Novel, and proprietary hyper immune globulin targeting strep pneumonia.
Adam Grossman: We anticipate generating proof of concept animal data by year end and if successful we believe we will be able to rapidly advance the program into a registrational trial.
Adam Grossman: Crucially, we remained materially non reliance on near term regulatory catalysts.
Adam Grossman: And we believe that we are largely insulated from potential disruptions at the FDA.
Adam Grossman: As we continue to advance that we believe is a top tier growth profile within the sector. It's important to highlight that in the current healthcare backdrop that atmos product portfolio remains insulated from government price negotiations that affect other sectors of the pharmaceutical industry.
Adam Grossman: This differentiation further underscores admin strong reimbursement profile and growth durability.
Adam Grossman: As we reflect on our successes and upwardly revised projections.
Adam Grossman: We do want to take a moment to express our sincere congratulations and appreciation to our phenomenal staff.
Adam Grossman: Your unwavering commitment dedication and hard work have been instrumental in driving add much progress and achievements.
Adam Grossman: It is your passion and resilience that enable us to navigate the challenges and seize opportunities in this dynamic environment.
Adam Grossman: Collectively we look forward to continuing our journey of innovation and excellence in service of our mission.
Adam Grossman: With that I'd now like to turn the call over to Brad to review first quarter financials in more detail.
Brad Page: Thank you Adam.
Brad Page: We issued a press release earlier today outlining our first quarter 2025 financial results I'll now discuss some of the key financial highlights from the first quarter.
Brad Page: Total reported revenue was $114 8 million for the quarter ended March 31, 2020 fives.
Brad Page: As compared to $81 $9 million for the quarter ended March 31 2024.
Brad Page: The increase of $32 $9 million translating to 40% year over year growth.
Brad Page: Adjusting for the aforementioned the voluntary product withdrawals during the first quarter coal first quarter 2025 revenues would have been $118 $6 million representing.
Brad Page: <unk> approximately 45% year over year growth.
Brad Page: This increase in total revenue is primarily related to increased sales of incentives.
Brad Page: As we continue to experience increased acceptance and utilization by physicians payers and patients for this product.
Brad Page: Gross profit was $61 $1 million for the quarter ended March 31, 2025, as compared to $39 1 million for the quarter ended March 31 2024.
Brad Page: This gross profitability for the first quarter of 2025 translates to 53, 2% compared to 47, 8% for the comparable 2024 quarter.
Brad Page: Adjusting for the aforementioned voluntary product withdrawals.
Brad Page: First quarter 2025, adjusted gross margins would have been 54, 7% the improvement in gross margin is primarily driven by a significantly more favorable mix of higher margin <unk> sales in the first quarter of 2025 as compared to the first quarter of 2000.
Brad Page: 24, along with the operational efficiencies achieved resulting in a reduction in manufacturing costs.
Brad Page: Adjusted EBITDA was $47 $9 million for the quarter ended March 31, 2025, as compared to adjusted EBITDA of $26 4 million for the quarter ended March 31 2024.
Brad Page: Adjusted EBITDA for the quarter includes all non-GAAP reconciliation items, including stock based compensation depreciation amortization interest expense and loss on debt extinguishment the.
Brad Page: The 81% year over year growth of adjusted EBITDA was primarily due to the substantial increase in operating income.
Brad Page: GAAP net income was $26 $9 million for the quarter ended March 31, 2025 compared to a GAAP net income of $17 8 million for the quarter ended March 31 2020 for.
Brad Page: The increase was primarily due to the increase in operating income and lower interest expense.
Brad Page: Adjusted net income was $33 $3 million for the quarter ended March 31, 2025, as compared to adjusted net income of $17 8 million for the quarter ended March 31, 2024, translating to an 87% year over year growth.
Brad Page: As Adam mentioned, we have continued to Opportunistically and strategically increased medical education and promotion activities. During the first quarter in advance of anticipated increases and high titer plasma supply provided by the recently secured long term supply agreements supporting.
Brad Page: Incentives revenue growth trajectory.
Brad Page: Accordingly, we would expect the normalized opex run rate to be lower than the spend reported in the first quarter as we progressed through 2025.
We believe we are just beginning to generate financial results that demonstrate the distinct operating leverage that our business can realize if our revenue continues to grow as planned and fixed expenses are tightly managed.
Brad Page: Based on a robust $171 million in combined cash and receivables at the end of the first quarter of 2025 in.
Brad Page: In combination with a significant adjusted EBIT growth, we believe the company's balance sheet strength, largely insulates admah from broader credit and equity market volatility.
Adam Grossman: Accordingly, as Adam mentioned, we have recently taken measures to meaningfully reduce the company's cost of debt and we are pleased to have a newly authorized $500 million stock repurchase program, enabling us to be opportunistic in the periods ahead.
Adam Grossman: Over the course of 2025 and beyond we anticipate significant growth in our cash balance.
Adam Grossman: Which should allow <unk> to continue to reduce the company's weighted average cost of capital and advance all growth initiatives from a position of strength.
Adam Grossman: With that I'll now turn the call back over to Adam for closing remarks.
Adam Grossman: Thank you Brad.
Adam Grossman: Adam is building on its robust momentum with significant financial growth and operational treatments driven by our uniquely positioned U S based supply chain.
Adam Grossman: Our end to end control, an agile business model allows us to operate independently of global trade volatility, while maintaining substantial control of our integrated supply chain.
Adam Grossman: We believe this is a critical advantage for asthma and the current geopolitical climate.
Adam Grossman: With recent FDA approval of our yield enhanced production process further strengthening our market position.
Adam Grossman: Unlocking potential opportunities for accelerated revenue and earnings growth.
Adam Grossman: Successfully bringing our innovative yield enhancement process from concept through development and ultimate FDA approval. We believe further validates the robust and capital efficient internal R&D engine AD asthma and.
Adam Grossman: <unk>, both product and production innovations.
Adam Grossman: As we anticipate continued demand for our commercial products and a favorable shift in our revenue mix, we remain confident in our ability to achieve sustainable revenue and earnings growth and deliver long term value to our stockholders.
Adam Grossman: Looking ahead, we are excited about the potential impact of our development initiatives and the resilience of our business model positioning admin is a leader in the rapidly evolving biopharma landscape.
Adam Grossman: With upwardly revised 2025, and 2026 financial guidance, we see a clear path to expanding our market presence and capitalizing on the opportunities within our pipeline.
Adam Grossman: Together, we believe we are poised to drive meaningful advancements in health care underscoring our commitment to innovation and excellence and ultimately unlocking continued stockholder value.
Adam Grossman: With that I'd now like to open up the call for your questions operator.
Adam Grossman: Thank you to ask a question. Please press star one on your telephone and wait for your name to be announced.
Adam Grossman: And to withdraw your question. Please press star one again.
Adam Grossman: And please standby, while we compile the Q&A roster.
Adam Grossman: Okay.
Adam Grossman: And the first question comes from Anthony Petrone with Mizuho.
Adam Grossman: Your line is now open.
Adam Grossman: Alright, Thanks, and good afternoon, everyone and congrats here on really strong start to the year.
Adam Grossman: And the recent FDA clearance on yield enhancement I know it was a big lift for the team.
Speaker Change: Thanks Anthony.
Adam Grossman: Intrigued by the guidance here Adam.
Speaker Change: Raising.
Speaker Change: The range once again here 10 million in $2025 $20 million next year.
Speaker Change: But importantly, not including yield and yield enhancement.
Speaker Change: Our understanding is you needed to manufacture.
Speaker Change: I think at least several batches at the the higher yield run rate to secure FDA clearance.
Speaker Change: And that with FDA clearance you could release those.
Speaker Change: Into the marketplace. So maybe just a recap on.
Unknown Executive: There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company's request and will be available on the company's website approximately two hours following the end of the call.
Speaker Change: How much was prepared to secure FDA clearance.
Speaker Change: And when do you think those lots could actually begin contributing to revenue.
Speaker Change: And I'll have a couple of follow ups.
Speaker Change: Sure. Thanks, Anthony very much we appreciate the support so youre exactly right.
Unknown Executive: At this time, I would like to introduce the company. Please go ahead.
Speaker Change: In order to have this FDA prior approval prior approval supplement approved we manufactured three conformance lots at the commercial scale <unk>.
Unknown Executive: Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics financial results for the first quarter of 2025 and recent corporate updates.
Speaker Change: <unk> one our incentives.
Speaker Change: We expressly excluded this from 2025 guidance altogether.
Unknown Executive: I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brad Tade, Chief Financial Officer and Treasurer. During today's call, Adam will provide some introductory comments and provide an update on corporate progress, and then Brad will provide an overview of the company's first quarter 2025 financial results.
Speaker Change: We take the same conservative approach to guidance that we always have.
Speaker Change: I feel confident that we should be able to have these these lots labeled package and released.
Speaker Change: But we are looking at this conservatively, we want to sell down all of the <unk>.
Unknown Executive: Finally, Adam will then provide some brief summary remarks before opening up the call for questions.
Speaker Change: Call. It the old process of 4400 liter scale produced product first we want to make sure that all of that product is out of inventory.
Unknown Executive: Earlier today, we issued a press release detailing the first quarter 2025 financial results and summarize certain achievements and recent corporate updates. The release is available on our website at www.admabiologics.com.
Speaker Change: And based on forward looking demand trends for our center and but again, we feel confident that that we certainly have a good shot on goal and you could see us.
Unknown Executive: Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represent the company's intentions, expectations, or beliefs concerning future events, which constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to factors, risks, and uncertainties. Such as those details in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent We specifically disclaim any obligations to update any such statements except as required by the federal securities law.
Speaker Change: Take the same approach that we've always taken which is when we have that visibility will increase guidance and we feel very very good about our position right now.
Speaker Change: We are currently manufacturing at the yield improvement scale. So we feel really good about that we're implementing that extremely rapidly and hats off to the team here for getting it done but.
Speaker Change: Same conservative approach, Anthony we'd rather under promise and over deliver and we feel really good about where guidance is for 25 and.
Speaker Change: 26.
Speaker Change: We've taken a conservative approach to yield enhancement again, coupled with the fact that we want to make sure that we sell out all the inventory.
Speaker Change: At the old process, and you will see margins start to certainly.
Speaker Change: Expand rapidly throughout 2026.
Speaker Change: If everything goes well, 100% of what we're going to sell in 2026.
Speaker Change: Will be manufactured at the yield improvement scale. So my commercial team is listening get.
Unknown Executive: We refer you to the disclosure notice section in our earnings release we issued today in the risk factors section in our SEC filings and our quarterly report on Form 10-Q for the quarter ended March 31, 2025, for discussion of important factors that could cause actual results to differ materially from these forward-looking statements.
Speaker Change: Get it on pulling through the channel.
Speaker Change: Lovely.
Speaker Change: Totally understood and a good approach there quick follow ups I'll hop and let us jump in here one is and Brad you mentioned this in your remarks.
Unknown Executive: Please note that the discussion on today's call includes certain non-GAAP financial measures, including adjusted total revenue, adjusted EBITDA, and adjusted net income. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings.
Speaker Change: Adam you alluded to it so there is going to be some investment here I think in demand generation percentage now that you have increased supply visibility.
Speaker Change: A question on this is how much.
Speaker Change: How much backlog.
Speaker Change: Right now is there if you will on <unk>.
Adam Grossman: With that, I would now like to turn the call over to Adam Grossman. Adam, go ahead. Thank you, Skyler. Good afternoon, everyone. ADMA's momentum has carried strongly into the first quarter of 2025, demonstrating robust execution across all aspects of our business. The advantages of our vertically integrated U.S. based supply along with our domestic commercial footprint have proven critical in the current geopolitical and trade landscape. This strategic positioning has enabled uninterrupted operations and consistent fulfillment of demand, even in the face of escalating global tariff tensions. with our focus solely on the U.S. healthcare ecosystem. and Completely Domestic Plasma Sourcing, Production and Distribution Operations.
Speaker Change: That you can fill sort of near term.
Speaker Change: And then how much do you think demand generation can generate.
Speaker Change: And the last quick one would be you know have a multi disciplinary capital allocation selection.
Speaker Change: Youre talking about recapitalization of that you have an R&D program pneumococcal pneumonia and now we have a 500 million authorization. So maybe just the priorities for capital allocation going forward again congratulations thanks.
Speaker Change: Sure.
Speaker Change: Anthony we.
Speaker Change: We feel that the opex.
Speaker Change: Is going to come down sequentially youre going to see.
Speaker Change:
Speaker Change: Youre going to see the Opex lines start to normalize starting in the second quarter.
Adam Grossman: We believe ADMA is uniquely insulated from the tariff and trade volatility potentially affecting our multinational competitors.
Speaker Change: Where we're already halfway through the second quarter and the demand indicators for all of our products look very very healthy and strong we.
Speaker Change: We anticipate sequential growth.
Adam Grossman: The recent approval of our innovative yield enhancement production process marks a pivotal achievement for ADMA, and it's anticipated to provide 20% more bulk IG from the same starting plasma volume. as the first US producer of plasma derived products to achieve regulatory approval for a novel yield enhancement process. ADMA continues to demonstrate its leadership in modernizing and advancing plasma fractionation through agile forward thinking, scientific development and execution. We commend our team for advancing this new production process from concept to approval, with speed and capital efficiency. And we thank the FDA for its thorough and timely review as well as the agency's commitment to expanding IG access for immunocompromised patients throughout the U.S.
Speaker Change: From the top and bottom line as we progress throughout this year.
Speaker Change: Regarding our capital allocation I mean look we feel really really good about.
Speaker Change: Forecasted forward looking cash generation and profitability outlook.
Speaker Change: The free cash flow that we are planning to generate here, especially with yield enhanced produced product.
Speaker Change: We will provide us with substantially enough cash to do all the things that you mentioned paid.
Speaker Change: Pay down debt.
Speaker Change: Fund, our commercial strategy and growing the demand Q4, our products.
Speaker Change: Our R&D with STR one as.
Speaker Change: As well as we should have them the money on the balance sheet too.
Speaker Change: Repurchasing stock I mean, where we're looking at this from a position of strength.
Speaker Change: The forward looking cash generation that we've seen I mean, it's it's it's very.
Adam Grossman: with our innovative capital efficient and robust internal R&D engine. we believe, which we believe has been further validated with this FDA approval. We look forward to confidently advancing our R&D platform.
Speaker Change: Exciting to be in this position.
Speaker Change: I've never felt this good about being the CEO of asthma biologics ever.
Speaker Change: And.
Speaker Change: Things are things are humming along here and we really feel good about this.
Adam Grossman: Further optimizing production capabilities and progressing novel pipeline programs, most notably SG001, which exemplify our commitment to product and process innovation and meeting the unmet medical needs for immunocompromised Our financial results for the first quarter reflect substantial growth in operational achievement. Total revenues reached $114.8 million on a reported basis. representing an impressive 32.9 million year over year in and marking a growth rate of approximately 40%. Adjusting for the one-off voluntary product withdrawals during the quarter. Total first quarter 2025 revenues would have been $118.6 million. representing approximately 45% year over year growth. Illustrating ADMA's still-nascent operating leverage, first quarter 2025 adjusted net income and adjusted EBITDA grew by approximately 87% and 81% year-over-year respectively.
Speaker Change: The priorities.
Speaker Change: To put them in an order I mean, it's all the priority and and I think we feel great that we've got the cash generation outlook that.
Speaker Change: With the share repo in place that'll be under a <unk> one plan. So we'll put that in place but.
Speaker Change: We plan to stop.
Speaker Change: Got that.
Speaker Change: In the near term.
Speaker Change: See that we are looking at novel ways too.
Speaker Change:
Speaker Change: Reduce our cost of debt saving one 1%. We think we think is fantastic in this backdrop.
Speaker Change: And depending upon how how.
Speaker Change: The financial markets.
Speaker Change: Play out.
Speaker Change: We will make the decisions in real time, do we pay down more debt, we buy back shares, but we certainly have enough cash that we are looking.
Speaker Change: Looking at.
Speaker Change: Generating in the forward looking periods to support everything that we wanted to do with the business and more yes. Anthony again, we're going to continue to see revenue growth and the evolving mix shift from <unk>. In addition to the yield enhancement, resulting in margin expansion and that coupled with the opex normalization that will translate into.
Adam Grossman: These results underscore the efficacy of our biologic therapies for immunocompromised patients across the U.S. as well as the dedication and expertise of our leadership team and exceptional staff.
Speaker Change: Net income and EBITDA expansion to Adam's point, we feel like we are entering the second quarter in the second half of 2025 from a position of strength from a balance sheet and with the bolus of expenses associated with yield enhancement and <unk>.
Adam Grossman: Given by our commitment to financial and operational excellence, we are yet again raising guidance for both 2025 and 2026. For 2025, we are increasing total revenue guidance to $500 million or more, increasing adjusted EBITDA guidance to at least $235 million, and reaffirming adjusted net income guidance of $175 million or This upwardly revised 2025 guidance excludes potential accretion from the monetization of products sold using the now approved enhanced yield process. which is a function of conservatively contemplating assumptions around timing of the production ramp up and lot release.
Speaker Change: Promotional activities and medical education behind US, we feel we feel great with those investments and we feel again like we are entering Q2 in the second half from a position of strength both on the balance sheet P&L.
Speaker Change: Thank you so much I'll hop back in.
Speaker Change: Yeah.
Speaker Change: Thanks Anthony.
Speaker Change: And our next question comes from Kristen <unk> with Cantor Fitzgerald. Your line is open.
Speaker Change: Hi, This is Rick Miller on for Kristen. Thanks for taking our questions earlier. This year you were talking about the ability through some of the new supply agreements to access around 250 centers offer collection can you help us understand what percentage of these centers are currently contributing to the source plasma mix and then we'll have another one after that.
Adam Grossman: We are additionally increasing top and bottom line guidance for 2020 enabled by recent FDA approval of our enhanced yield production process. as well as our ongoing commercial momentum. This increased 2026 guidance, consistent with historically provided financial targets, reflects assumptions of continued margin expansion as our revenue mix shifts towards a centage. Accordingly, for 2026, we are increasing total revenue guidance to $625 million or more, adjusted EBITDA to $340 million or more, and adjusted net income guidance to at least $245 million.
Speaker Change: Thanks, Rick very much we appreciate your interest and support.
Speaker Change: With respect to the Onboarding of these centers I think substantially all of the centers are now send.
Speaker Change: Sending in samples and we are screening from them, we've really done a great job here internally again hats off to our.
Speaker Change: Laboratory testing team for this but we.
Speaker Change: We are collecting more plasma than our forecast and we feel real good about this.
Speaker Change: Thats, partially contributing to our increase in guidance for this year and next year.
Adam Grossman: Further yet, we are increasing our total annual revenue expected to be realized prior to 2030 to $1.1 billion or more, up from the prior guidance of $1 billion. On ADMA's pathway to reach this rapid revenue growth, the company expects meaningfully outsized margin expansion during the same periods prior to 2030. through the first quarter of 2025 and subsequent periods. We have driven outsized demand for our commercial products, including both Bivigam and Ascentis. with demand consistently exceeding our prior supply capability. New patient starts continue to grow and forward looking demand indicators remain robust. Furthermore, we believe recent expansions in both third party and internal high titer plasma supply have markedly de-risked our growth trajectories and enhanced our visibility for continued revenue growth and margin expansion.
Speaker Change: But where we're running on all cylinders, we are collecting more plasma than we anticipated, we're making more Senate batches.
Speaker Change: The first yield enhanced batch it is incentive batch so we feel real good about this we're very very pleased with with.
Speaker Change: How the supply.
Speaker Change: Is.
Speaker Change: Coming from our third party partners and these contracts have really derisked, the historical bottleneck and supply constraints and we feel that we're going to be able to hit all the targets that we're putting out there and.
Speaker Change: And we certainly have shots on goal easy shots I think.
Speaker Change: To exceed what we are forecasting and guiding to today.
Speaker Change: Okay, and then one more from us.
Speaker Change: And thinking about scaling of centers do you have any updated color on kind of how the strategy is going for retention hot retaining high titer donors any change in strategy, there how youre going about it.
Adam Grossman: All told, we are increasingly confident in our ultimate ability to drive total incentive annual revenues alone to potentially $1 billion or more, with lasting growth and branded durability at least through 2035. We believe our strong balance sheet, capital flexibility and growing cash and receivables provide a robust buffer against volatility in the current credit and equity market backdrop. Cash on hand and accounts receivable grew to a combined $171 million at the end of the first quarter. and we anticipate significant sequential operating cash flow growth throughout 2025. as detailed in our recently announced debt reorganization with Aries Capital Management.
Speaker Change: Strategy seems to be working I mean, if you compensate your donors and you make them feel good and you treat them like vips, they keep coming back so.
Speaker Change: Seeing great donor retention.
Speaker Change: Identifying new donors all the time.
Speaker Change: The program seems to be working extremely well. So we don't see any any need to change strategy right now.
Speaker Change: The margins for a senator still in that in that mid 80.
Speaker Change: <unk> percent gross margin range.
Speaker Change: And that is with the increased donor fees. So.
Speaker Change: When you couple that with the 20%.
Speaker Change: Increase in bulk AG output from yield enhancement.
Adam Grossman: ADMA paid down all but $2.5 million of the term loan using available proceeds from the revolving credit facility. Due to the lower interest rate spread for the revolving credit facility compared to the term loan, this reorganization provides for a 1.1% nominal reduction in ADMA's total cost of debt. ADMA remains committed to optimizing its capital structure and continuing to organically pay down its total debt over the near term.
Speaker Change: Margins margins for 2026 are going to grow exponentially, we're really excited about the opportunity.
Speaker Change: Great. That's all from US will hop back in the queue. Thank you.
Rick Miller: Thanks, Rick.
Speaker Change: And the next question comes from Gary Nachman with Raymond James Your line is open.
Gary Nachman: Hi, guys, great. Thanks, Andrew Hi, and congrats on getting the manufacturing process approval.
Adam Grossman: Additionally, we are pleased to announce that our Board of Directors has recently authorized a stock repurchase program that will allow ADMA to purchase up to $500 million of its common stock, or approximately 8% of the company's total current market share. We will be opportunistic in deploying these repurchases. which will be enabled by the anticipated strong balance sheet and forecasted earnings and cash generation moving forward.
Gary Nachman: So knowing that youll be able to generate 20% more yield with your plasma are you able to release more new patients from the queue at a faster pace.
Gary Nachman: Or do you need to have the finished product on hand before you do that.
Gary Nachman: So how do you envision managing that in terms of the patient Q.
Gary Nachman: And maybe.
Speaker Change: You could just speak more generally Adam just following on this about.
Gary Nachman: Now that <unk> has been building.
Adam Grossman: The collective impact of these assertive initiatives are intended to instill confidence in our stockholder base. That ADMA's management team and board of directors are aligned with you, our stockholders, and we are committed to generating durable stockholder value. We believe ADMA is executing from a position of strength. Delivering durable branded growth in underserved markets. and building what we expect will be one of the most resilient and scalable earning streams in the biopharma complex. In addition, ADMA is pursuing capital efficient initiatives to further diversify its uniquely leverageable business model, particularly through the advancement of its lead pipeline program SG001, a novel and proprietary hyperimmune globulin targeting strep pneumonia.
Speaker Change: In terms of demand for assertive.
Speaker Change: And how long before you think you'll be able to get to most of those patients like is it one year two years, how do you think that's going to evolve.
Speaker Change: Well.
Speaker Change: Hi, My first gut reaction to that part of it is as I hope, we get to a place where there is so much demand that we can never meet it and we're talking about expanding capacity and growing even bigger than than we are today and that we think with with new.
Speaker Change: Revised topline guidance prior to $2031 1 billion.
Speaker Change: Can get there and we believe that there are more patients out there.
Speaker Change: We were very excited for that for that opportunity.
Adam Grossman: We anticipate generating proof-of-concept animal data by year-end, and if successful, we believe we will be able to rapidly advance the program into a registrational trial. Crucially, we remain materially non-reliant on near-term regulatory catalysts. and we believe that we are largely insulated from potential disruptions at the FDA. As we continue to advance what we believe is a top tier growth profile within the sector. It's important to highlight that in the current healthcare backdrop, that ADMA's product portfolio remains insulated from government price negotiations that affect other sectors of the pharmaceutical industry. This differentiation further underscores ADMA's strong reimbursement profile and growth durability.
Speaker Change: <unk>.
Speaker Change: I can tell you that we are releasing more product.
Speaker Change: Than ever before we made more product late last year.
Speaker Change: As we said on previous calls.
Speaker Change: And we have that product available.
Speaker Change: Starting now basically.
Speaker Change: We've seen some great great demand trends as we enter the second quarter and ended the first quarter and we're releasing more drug the patient <unk> still exists there are still patients waiting in line for therapy.
Speaker Change: We're seeing robust continuation of patients on drug and we feel very good about our ability to have more supply in the market for us and <unk> been getting more patients on therapy.
Adam Grossman: As we reflect on our successes, an upwardly revised projection.
Speaker Change: Youre going to see the.
Speaker Change: Accounts receivable grow.
Adam Grossman: We do want to take a moment to express our sincere congratulations and appreciation to our phenomenal staff. Your unwavering commitment, dedication and hard work have been instrumental in driving ADMA's progress and achievement. It is your passion and resilience that enable us to navigate the challenges and seize opportunities in this dynamic environment. Collectively, we look forward to continuing our journey of innovation and excellence in service of our mission.
Speaker Change: And.
Speaker Change: You see that number as we in the first quarter I think cash and receivables were about on <unk>.
Speaker Change: <unk> hundred $71 million or just about.
Speaker Change: $100 million of.
Speaker Change: Receivables and.
Speaker Change: The majority of our sales continued to be from incentive as Brad said earlier.
Speaker Change: Mix shift continues to <unk>.
Speaker Change: Bandwidth incentive being the overwhelming majority.
Speaker Change: The revenue that we're generating.
Brad Tade: With that, I'd now like to turn the call over to Brad to review first quarter financials in more detail. Thank you, Adam. We issued a press release earlier today outlining our first quarter 2025 financial results. I'll now discuss some of the key financial highlights from the first quarter. Total reported revenue was $114.8 million for the quarter ended March 31, 2025, as compared to $81.9 million for the quarter ended March 31, 2024, an increase of $32.9 million, translating to 40% year-over-year growth. Adjusting for the aforementioned voluntary product withdrawals during the first quarter, total first quarter 2025 revenues would have been $118.6 million, representing approximately 45% year-over-year growth.
Speaker Change: And we we.
Speaker Change: We feel.
Speaker Change: Really really good.
Speaker Change: <unk> grew because of the timing of lot releases.
Speaker Change: <unk> had a number of lot releases come in from FDA.
Speaker Change: In the March timeframe.
Speaker Change: The product is being pulled through at a rapid clip.
Speaker Change: So hopefully that answers your question, but the Q remains.
Speaker Change: We are adding more patients every single week and we feel good about it patients continues to do well on on drug therapy, and they are staying on drug for long periods of time.
Speaker Change: Yes that was definitely helpful.
Speaker Change: And then.
Speaker Change: Something that we've talked about in the past, but whats the status for you to be able to generate some.
<unk> data.
Speaker Change: Demonstrating the benefits of using incentives compared to standardized products for the more severe patients.
Speaker Change: I think you've talked about maybe having that later this year and then how would you expect to utilize that data with physicians and payers.
Brad Tade: This increase in total revenue is primarily related to increased sales of Ascentive as we continue to experience increased acceptance and utilization by physicians, payers, and patients for this product. Gross profit was $61.1 million for the quarter ended March 31, 2025, as compared to $39.1 million for the quarter ended March 31, 2024. This gross profitability for the first quarter of 2025 translates to 53.2% compared to 47.8% for the comparable 2024 quarter. Adjusting for the aforementioned voluntary product withdrawals. First quarter 2025 adjusted gross margins would have been 54.7%. The improvement in gross margin is primarily driven by a significantly more favorable mix of higher margin IG sales in the first quarter of 2025, as compared to the first quarter of 2024.
Speaker Change: Maybe one talk about.
Speaker Change: How many physicians are currently using the product and how many more you think you could tap into potentially.
Speaker Change: And then from a payer standpoint that youre comfortable that youre not going to get the headwinds as the product continues to grow.
Speaker Change: So.
Gary Nachman: We're still on track Gary.
Gary Nachman: Health economic outcome data farmer economic data is on track.
Gary Nachman: The team is working diligently.
Gary Nachman: With statisticians, calling all the.
Gary Nachman: ICD codes and we feel good about being in a position to have something published later this year.
Gary Nachman: This.
Gary Nachman: This work that we're doing is really designed to.
Gary Nachman: Demonstrate the real world evidence and it's resonating amongst the government pay and the commercial payers.
Gary Nachman: <unk>.
Gary Nachman: The key driver of this this project internally is to ensure that access for the drug is available from government payers and commercial payers and we expect that that any publications that we put out we will.
Brad Tade: Along with the operational efficiencies achieved resulting in a reduction in manufacturing costs. Adjusted EBITDA was $47.9 million for the quarter ended March 31, 2025, as compared to adjusted EBITDA of $26.4 million for the quarter ended March 31, 2024. Adjusted EBITDA for the quarter includes all non-GAAP reconciliation items, including stock-based compensation, depreciation, amortization, interest expense, and loss on debt extinguishment. The 81% year-over-year growth of adjusted EBITDA was primarily due to the substantial increase in operating income. Gap net income was $26.9 million for the quarter ended March 31, 2025, compared to a gap net income of $17.8 million for the quarter ended March 31, 2024.
Gary Nachman: Continue to drive home to the commercial payer mostly that.
Gary Nachman: This drug while it is.
Gary Nachman: Is sold at a premium price to standard <unk> is keeping patients out of a hospital to keeping them in work and school, allowing them to lead normalized without the additional medical costs from other opportunistic infections and other complications that these patients experience. So.
Gary Nachman: We're on track to have this have this data published.
Gary Nachman: Prior to year end.
Gary Nachman: And as soon as we've got something to announce we will certainly.
Gary Nachman: <unk> put out a press release to the market.
Gary Nachman: Okay excellent and then just two more quick ones just explaining the voluntary product withdrawals in lung Q why that occurred.
Gary Nachman: Does that product come back at some point or it's basically just gone.
Gary Nachman: And then also just your comment on extending the IP of incentives beyond 2035, just the type of I guess tools that you have to potentially do that as this new manufacturing process one of those tools and when you think we might hear about that longer durability.
Brad Tade: The increase was primarily due to the increase in operating income and lower interest expense. Adjusted net income was $33.3 million for the quarter ended March 31, 2025, as compared to adjusted net income of $17.8 million for the quarter ended March 31, 2024, translating to an 87% year-over-year growth. As Adam mentioned, we have continued to opportunistically and strategically increase medical education and promotion activities during the first quarter in advance of anticipated increases in high-titer plasma supply provided by the recently secured long-term supply agreements, supporting Athena's revenue growth trajectory. Accordingly, we would expect the normalized OPEX run rate to be lower than the spend reported in the first quarter as we progress through 2025.
Gary Nachman: Sure. So I'll touch your first question first.
Gary Nachman: These are inherent.
Gary Nachman: Adverse events that patients experience, it's labeled in the package insert and.
Gary Nachman: These are known.
Gary Nachman: Adverse events that you experienced with IAG.
Gary Nachman: Not alone in the quarter other manufacturers of IAG you can see on the FDA website also had recalls this was.
Gary Nachman: We look at it as a onetime nonrecurring.
Gary Nachman:
Gary Nachman: Occurrence here that.
Gary Nachman: In the interest of public safety, we voluntarily.
Gary Nachman: To remove the product from the market.
Brad Tade: We believe we are just beginning to generate financial results that demonstrate the distinct operating leverage that our business can realize if our revenue continues to grow as planned and fixed expenses are tightly managed. Based on the robust $171 million in combined cash and receivables at the end of the first quarter of 2025, in combination with the significant adjusted EBITDA growth, we believe the company's balance sheet strength largely insulates ADMA from broader credit and equity market volatility. Accordingly, as Adam mentioned, we have recently taken measures to reduce the company's cost of debt, and we are pleased to have a newly authorized $500 million stock repurchase program, enabling us to be opportunistic in the periods ahead.
Speaker Change: First and foremost and I've said this since <unk> was founded our mission here is to provide safe efficacious product to patients to.
Gary Nachman: To keep the FDA happy and we're going to make tough decisions here that that.
Speaker Change: May impact our financials, but are going to ultimately do the right thing for the patients.
Speaker Change: And show the FDA that we look at these things and we take them seriously. So.
Speaker Change: One time occurrence here. These lots have been voluntarily withdrawn from the market any inventory that we had.
Speaker Change: We will we will destroy.
Speaker Change: <unk> have been issued to customers for that product I think it was around $3 $8 million in the quarter correct.
Speaker Change: <unk>.
Speaker Change: This is our six year of commercialization of our products.
Speaker Change: That's never happened to us before.
Speaker Change: I think.
Speaker Change: Pretty much all other producers maybe save for one.
Brad Tade: Over the course of 2025 and beyond, we anticipate significant growth in our cash balance. which should allow ADMA to continue to reduce the company's weighted average cost of capital and advance all growth initiatives from a position of strength.
Speaker Change: Have not experienced something like this throughout their manufacturing life, but we're dealing with plasma derived biologics and sometimes things happen.
Speaker Change: Unfortunately, it happened here, but.
Speaker Change: Our products are safe.
Adam Grossman: With that, I'll now turn the call back over to Adam for closing remarks. Thank you, Brad. ADMA is building on its robust momentum with significant financial growth and operational achievements driven by our uniquely positioned US-based supply chain. Our end-to-end controlled and agile business model allows us to operate independently of global trade volatility, while maintaining substantial control of our integrated supply We believe this is a critical advantage for ADMA in the current geopolitical climate.
Speaker Change: We've got tens of thousands of Graham's being infused all the time and we do not expect any any further go forward impacts.
Speaker Change: From the product withdrawals.
Speaker Change: Moving to your next question on IP, We've got a lot of science going on here and I think thats evidenced by by the approval.
Speaker Change: Of yield enhancement and we've got a lot of great things that that our team has worked on with respect to our testing assay and the and the methods that they.
Speaker Change: Are using to identify these donors faster.
Adam Grossman: With recent FDA approval of our yield enhanced production process further strengthening our market position. Unlocking Potential Opportunities for Accelerated Revenue and Earnings Growth. Successfully bringing our innovative yield enhancement process from concept through development and ultimate FDA approval, we believe further validates the robust and capital efficient internal R&D engine at ADMA. Advancing both product and production innovation. As we anticipate continued demand for our commercial products and a favorable shift in our revenue We remain confident in our ability to achieve sustainable revenue and earnings growth and deliver long term value to our stock market.
Speaker Change: Sure.
Speaker Change: I think there are some levers that we can pull.
Speaker Change: Where we will be able to modify and amend the IP to include some of these novel methodologies to potentially expand beyond to mid.
Speaker Change: Mid year 2035.
Speaker Change: Still I'll say we've got.
Speaker Change: Over a decade.
Speaker Change: Patent life protection here and to the best of our knowledge, we are not aware of anybody doing what we're doing globally.
Speaker Change: And we feel really good about our IP position and we feel it's highly defensible and.
Speaker Change: We're just going to keep doing doing what we do Gary but.
Adam Grossman: Looking ahead, we are excited about the potential impact of our development initiatives and the resilience of our business model. Positioning ADMA as a Leader in the Rapidly Evolving Biopharma With upwardly revised 2025 and 2026 financial guidance, we see a clear path to expanding our market presence and capitalizing on the opportunities within our pipeline. Together, we believe we are poised to drive meaningful advancements in healthcare, underscoring our commitment to innovation and excellence. and ultimately unlocking continued stockholder value.
Speaker Change: Looking at being the first company in the U S to have.
Speaker Change: Yield enhancement.
Speaker Change: Approved.
Speaker Change: We really.
Speaker Change: I just feel great about what our what our team is doing here, where we're showing the bigger companies that being a small nimble.
Speaker Change: Fast moving company Ken.
Speaker Change: Really drive value creation for stockholders and get good products to patients more rapidly.
Speaker Change: <unk>.
I'm pretty confident in our team's ability im sure one or two of them are going to get nervous that im saying this but.
Unknown Executive: With that, I'd now like to open up the call for your questions. Operator. Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11 again. And please stand by while we compile the Q&A roster.
Speaker Change: I'm pretty sure that.
Speaker Change: We'll be in a good position to extend this IP, but.
Speaker Change: Even without it we got another decade to go and the amount of cash that we're going to generate between here and there is substantial I mean, we could we could buy back substantially more than the $500 million.
Speaker Change: Share repo that that we put up today.
Anthony Petrone: And the first question comes from Anthony Petrone with Mizzou. Your line is now open. Thanks and good afternoon everyone and congrats here on a really strong start to the year and the recent FDA clearance on yield enhancement. I know it was a big lift for the team. Absolutely. Thanks, Anthony.
Speaker Change: Yes.
Speaker Change: That's really helpful and that durability is really important so thanks for that.
Speaker Change: Thank you good questions.
Speaker Change: Ladies and gentlemen, this will conclude our question and answer portion of the call I'd like now to turn it back over to Adam for additional closing remarks.
Speaker Change: I just wanted to say thank you. Thank you to the <unk> team. Thank you to our stockholders for your continued support and for dialing in.
Adam Grossman: You know, intrigued by the guidance here, Adam, raising the range once again here 10 million and 2025 20 million next year. But importantly, not including yield and yield enhancement. You know, our understanding is you needed to, you know, manufacture I think at least several batches at the higher yield run rate to secure FDA clearance. and that, you know, with FDA clearance, you could release those, you know, into the marketplace. So maybe just to recap on how much was prepared to secure FDA clearance. And when do you think those lots could actually begin contributing to revenue?
Speaker Change: U S domiciled company, we feel real good about being insulated from all of the.
Speaker Change: Tariff noise that's out there.
Speaker Change: And.
Speaker Change: Hopefully we.
Speaker Change: We will be in a position to continue to deliver outstanding results. So thanks very much stay healthy.
Speaker Change: Enjoy spring wherever you are and have a good evening.
Speaker Change: Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.
Adam Grossman: And I'll have a couple of follow Sure. Thanks, Anthony, very much. We appreciate the support. So, you're exactly right. In order to have this FDA prior approval supplement approved, we manufactured three conformance lots at the commercial scale, two were Bivigam, one are Ascentive. We've expressly excluded this from 2025 guidance altogether. We take the same conservative approach to guidance that we always have. I feel confident that we should be able to have these lots labeled, packaged, and released. But we are looking at this conservatively. We want to sell down all of the, call it the old process, the 4,400 liter scale produced product first.
Adam Grossman: We want to make sure that all that product is out of inventory. And, you know, based on forward-looking demand trends for Ascentive and Bivigam, we feel confident that we certainly have a good shot on goal. And you could see us take the same approach that we've always taken, which is, you know, when we have that visibility, we'll increase guidance. And, you know, we feel very, very good about our position right now. We are currently manufacturing at the yield improvement scale. So we feel really good about that. We're implementing that extremely rapidly and hats off to the team here for getting it done.
Adam Grossman: But same conservative approach, Anthony, we'd rather under promise and over promises for 25 and, you know, 26. We've taken a conservative approach to yield enhancement, again, coupled with the fact that we want to make sure that we sell out all the inventory at the old process and you will see margins start to certainly expand rapidly throughout 2026. You know, if everything goes well, 100% of what we're going to sell in 2026 will be manufactured at the yield improvement scale.
Unknown Executive: So if my commercial team is listening, get it on, pull it through the channel. lovely, totally understood and a good approach there.
Unknown Executive: Quick follow ups, I'll hop in, let us jump in here. One is, and Brad, you mentioned this in your remark. Adam, you alluded to it. So there is going to be some investment here, I think, in demand generation percentage, now that you have increased supply visibility.
Unknown Executive: The question on this is how much how much, you know, backlog right now, is there, if you will, on incentive that you can fill sort of near term? And then how much you know, do you think demand generation can generate?
Unknown Executive: And the last quick one would be you now have a multidisciplinary capital allocation selection. You're talking about recapitalization of debt, you have an R&D program pneumococcal pneumonia, and now we have a 500 million authorization.
Adam Grossman: So maybe just the priorities for capital allocation, going forward. Again, congratulations. Thanks. Sure. You know, Anthony, we, we, we feel that the OPEC. is going to come down sequentially, you're going to see You're going to see the the OPEX line start to normalize starting in the second quarter. You know, we're we're already halfway through the second quarter and the demand indicators for all of our products look very, very healthy and strong. We anticipate sequential growth from the top and bottom line as we progress throughout this year. Regarding our capital allocation, I mean, look, we feel really, really good about our forecasted forward looking cash generation and profitability outlook.
Adam Grossman: You know, the free cash flow that we're planning to generate here, especially with yield enhanced produced product, will provide us with substantially enough cash to do all the things that you mentioned. Pay down debt. um fund our commercial strategy and and growing the demand queue for our products uh fund our R&D with SG01 uh as well as we should have the the money on the balance sheet to start repurchasing stock. I mean we're we're looking at this from a position of strength um the forward-looking cash generation that that we've seen I mean it's it's it's very exciting to be in this position.
Adam Grossman: Um I've never felt this good about being the CEO of ADMA Biologics ever and um you know things are things are humming along here and we we really feel good about this.
Adam Grossman: Um the priorities you know to to put them in an order I mean it's all a priority and and I think we feel Brad that that we've we've got the cash generation outlook that um you know with with the share repo in place uh that'll be under a 10b51 plan so we'll put that in place but um you know we plan to to start that uh in the near term. Uh you see that we're looking at novel ways to um uh reduce our our cost of debt uh saving 1.1 percent we think we think is fantastic in this backdrop and um you know we'll see how the financial markets uh play out you know.
Brad Tade: will make the decisions in real time. Do we pay down more debt? Do we buy back shares? But we certainly have enough cash that we are looking at generating in the forward-looking periods to support everything that we want to do with the business and more. Yeah, Anthony, again, we're going to continue to see revenue growth and the evolving mix shift from Bibigam to Ascentive, in addition to the yield enhancement resulting in margin expansion. And that coupled with the OPEX normalization, that will translate into net income and EBITDA expansion.
Brad Tade: To Adam's point, we feel like we are entering second quarter in the second half of 2025 from a position of strength from the balance sheet. And with the bolus of expenses associated with yield enhancement and promotional activities and medical education behind us, we feel great with those investments. And we feel, again, like we are entering Q2 in the second half from a position of strength, both on the balance sheet and P&L. Thank you so much.
Unknown Executive: I'll hop back in. Thanks, Anthony.
Rick Miller: And our next question comes from Kristen Kluska with Cantor Fitzgerald. Your line is open. Hi, this is Rick Miller on for Kristen. Thanks for taking our questions. Earlier this year, you were talking about the ability through some of the new supply agreements to access around 250 centers for collection. Can you help us to understand what percentage of these centers are currently contributing to the source plasma mix? And then we'll have another one after that. Thanks, Rick, very much. We appreciate your and Kristen's support.
Adam Grossman: With respect to the onboarding of these centers, I think substantially all of the centers are now sending in samples and we are screening from them. We've really done a great job here internally. Again, hats off to our laboratory testing team for this. But we are collecting more plasma than our forecast, and we feel real good about this. That's partially contributing to our increasing guidance for this year and next year. But we're running on all cylinders. We are collecting more plasma than we anticipated. We're making more assentive batches. The first yield-enhanced batch is an assentive batch.
Adam Grossman: So we feel real good about this. We are very, very pleased with how the supply is coming from our third-party partners. And these contracts have really de-risked the historical bottleneck and supply constraints. And we feel that we're going to be able to hit all the targets that we're putting out there. And we certainly have shots on goal, easy shots, I think, to exceed what we are forecasting and guiding to today.
Adam Grossman: Okay, then one more from us, as thinking about scaling incentive, do you have any updated color on kind of how the strategy is going for retention, retaining high titer donors? Any change in strategy there, how you're going about it? Strategy seems to be working. I mean, if you compensate your donors and you make them feel good and you treat them like VIPs, they keep coming back. So we're seeing great donor retention. We are identifying new donors all the time.
Adam Grossman: And the program seems to be working extremely well, so we don't see any need to change strategy right now. The margins for incentive are still in that mid-80% gross margin range, and that is with the increased donor fees. So when you couple that with the 20% increase in bulk IG output from yield enhancement, margins for 2026 are going to grow exponentially. We're really excited about the opportunity.
Unknown Executive: Great.
Unknown Executive: That's all from us. We'll hop back in the queue.
Unknown Executive: Thank you.
Gary Nachman: Thanks, Rick. And the next question comes from Gary Nachman with Raymond James. Your line is open. Hi, Gary. Great, thanks.
Gary Nachman: And hi, and congrats on getting the manufacturing process approval. So knowing that you'll be able to generate 20% more yield with your plasma, are you able to release more new patients from the queue at a faster pace? Or do you need to have the finished product on hand before you do that? So how do you envision managing that in terms of the patient queue? And, you know, maybe you could just speak more generally, Adam, just following on this about how that queue has been building in terms of demand for incentive. And how long before you think you'll be able to get to most of those patients?
Gary Nachman: Like, is it one year, two years? How do you think that's going to evolve?
Adam Grossman: Well, you know, my first gut reaction to that part of it is, I hope we get to a place where there is so much demand that we can never meet it, and we're talking about expanding capacity and growing even bigger than we are today, and that we think, you know, with new revised top-line guidance prior to 2030 of $1.1 billion, if we can get there and we believe that there are more patients out there, we're very excited for that opportunity. You know, I can tell you that we are releasing more product than ever before. We made more product late last year, as we said on previous calls, and we have that product available starting now, basically.
Adam Grossman: And we've seen some great, great demand trends as we enter the second quarter and ended the first quarter, and we're releasing more drug. The patient queue still exists. There are still patients waiting in line for therapy. We're seeing robust continuation of patients on drug, and we feel very good about our ability to have more supply in the market for Ascentive and getting more patients on therapy. You're going to see the accounts receivable grow, and, you know, you see that number as we end the first quarter. I think cash and receivables were about $171 million, just about $100 million of receivables.
Adam Grossman: And the majority of our sales continue to be from Ascentive, as Brad said earlier. The mix ship continues to expand with Ascentive being the overwhelming majority of the revenue that we are generating, and we feel really, really good. AR grew because of the timing of lot releases. We had a number of lot releases come in from FDA in the March timeframe, and the product is being pulled through at a rapid clip. So hopefully that answers your question, but the queue remains. We are adding more patients every single week, and we feel good about it. Patients continue to do well on drug therapy, and they're staying on drug for long periods of time.
Unknown Executive: Yeah, that was definitely helpful.
Gary Nachman: And then, you know, there's something that we've talked about in the past, but what's the status for you to be able to generate some HEOR data, demonstrating the benefits of using Ascentive compared to standard IG products for the more severe PI patients? I think you've talked about maybe having that later this year. And then how would you to utilize that data with physicians and payers?
Adam Grossman: So, you know, maybe one talk about how many physicians are currently using the product and how many more you think you could tap into potentially. And then from a payer standpoint, that you're comfortable that you're not going to get the headwinds as the product continues to grow. So we're still on track, Gary. Health economic outcome data, pharmacoeconomic data is on track. The team is working diligently with statisticians culling all the ICD codes. And we feel good about being in a position to have something published later this year. This work that we're doing is really designed to demonstrate the real world evidence.
Adam Grossman: And it's resonating amongst the government pay and the commercial payers. You know, the key driver of this project internally is to ensure that access for the drug is available from government payers and commercial payers. And we expect that any publications that we put out will continue to drive home to the commercial payer mostly that this drug, while it is sold at a premium price to standard IGs, is keeping patients out of the hospital, keeping them in work and school. It's allowing them to lead normal lives without the additional medical costs from other opportunistic infections and other complications that these patients experience.
Adam Grossman: So we're on track to have this data published prior to year end. And as soon as we've got something to announce, we will certainly put out a press release to the market.
Unknown Executive: Okay, excellent.
Unknown Executive: And then just two more quick ones.
Unknown Executive: Just explain the voluntary product withdrawals in one cue, why that occurred, and does that product come back at some point, or it's basically just gone.
Adam Grossman: And then also just your comment on extending the IP of Ascentive beyond 2035, just the type of, I guess, tools that you have to potentially do that. Is this new manufacturing process one of those tools? And when you think we might hear about that, long a durability. Thanks. Sure. So, I'll touch your first question first. You know, these are inherent adverse events that patients experience. It's labeled in the package insert. And, you know, these are known adverse events that you experience with IG. We were not alone in the quarter. Other manufacturers of IG, you can see on the FDA website, also had recalls.
Adam Grossman: This was, you know, we look at it as a one-time non-recurring occurrence here that, you know, in the interest of public safety, we voluntarily removed the product from the market. You know, first and foremost, and I've since ADMA was founded, our mission here is to provide safe, efficacious product to patients to keep the FDA happy. And we're going to make tough decisions here that may impact our financials, but are going to ultimately do the right thing for the patients and show the FDA that we look at these things and we take them seriously. So, one-time occurrence here, these lots have been withdrawn from the market.
Adam Grossman: Any inventory that we had, we will destroy. Credits have been issued to customers for that product. I think it was around $3.8 million in the quarter. And you know, this is our sixth year of commercialization of our products. It's never happened to us before. I think pretty much all other producers, maybe save for one, have not experienced something like this throughout their manufacturing life. But we're dealing with plasma derived biologics and sometimes things happen. And unfortunately, it happened here, but our products are safe. We've got, you know, tens of thousands of grams being infused all the time.
Adam Grossman: And we do not expect any further go forward impacts from the product withdrawals.
Adam Grossman: Moving to your next question on IP, you know, we've got a lot of science going on here. I think that's evidenced by the approval of yield enhancement. And, you know, we've got a lot of great things that our team has worked on with respect to our testing assay and the methods that they are using to identify these donors faster. And, you know, I think there are some levers that we can pull where we'll be able to modify and amend the IP to include some of these novel methodologies to potentially expand beyond mid-year 2035. Still, I'll say we've got, you know, over a decade of patent life protection here.
Adam Grossman: And to the best of our knowledge, we're not aware of anybody doing what we're doing globally. And we feel really good about our IP position and we feel it's highly defensible. And, you know, we're just going to keep doing what we do, but, you know, looking at being the first company in the U.S. to have yield enhancement approved, you know, we really, you know, I just feel great about what our, what our team is doing here, you know, we're, we're, we're, we're, we're, we're showing the bigger companies that being a small, nimble, fast moving company, you know, can really drive value creation for stockholders and get good products to patients more rapidly.
Adam Grossman: And, you know, I, I'm, I'm, I'm pretty confident in our team's ability. I'm sure one or two of them are going to get nervous that I'm saying this, but I'm pretty sure that we'll be in a good position to extend this IP. But even without it, we've got another decade to go. And the amount of cash that we're going to generate between here and there is substantial. I mean, we could, we could buy back substantially more than the 500 million share repo that that we put up today. Yep, no, that's always really helpful. And that durability is really important.
Unknown Executive: So thanks for that. No, thank you. Good question.
Adam Grossman: Ladies and gentlemen, this will conclude our question and answer portion of the call. I'd like now to turn it back over to Adam for additional closing remarks. I just want to say thank you. Thank you to the ADMA team. Thank you to our stockholders for your continued support and for dialing in. You know, as a U.S. domicile company, we feel real good about being insulated from all of the tariff noise that's out there. And, you know, hopefully, we'll be in a position to continue to deliver outstanding results. So thanks very much. Stay healthy. Enjoy spring wherever you are and have a good evening.
Unknown Executive: Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.